Interest rates make a BIG difference when you buy…

How Interest Rates Impact Your Buying Power

 

You probably know that interest rates affect your monthly mortgage payments, but most of us aren’t aware of just how big an impact they really have on a home loan. Each 1% change in interest rate equates to roughly a 10% change in buying power. This means you can qualify for a much more expensive home when rates are low, whereas higher rates mean you qualify for less home—even though you still pay the same monthly payment.

 

This first chart shows how much house you can buy for a set monthly payment. If you have $4,000 a month to budget for a house payment (before taxes and insurance), you could purchase a $949,000 house at today’s historically low 3% mortgage rate. If rates went up to 4%, the same monthly payment would only get you an $838,000 home. Your buying power diminishes considerably with each bump up in rates.

 

What you can afford based on the current interest rate..

 

Scrolling down, this second chart shows how interest rates impact monthly payments. If you’re purchasing a $950,000 house at today’s 3% interest rate, you’ll be paying $530 less every month than if you’d bought that same house when rates were 4%. That adds up quick…$6,360 in one year alone! This explains why so many renters are eagerly looking to buy right now, and why homeowners are refinancing at record rates.

 

Your monthly payment based on the current interest rate

 

Want to know how you can best take advantage of these historical low mortgage rates? Reach out to me for help evaluating whether it would make financial sense to refinance, buy, or sell while rates are low. I am always happy to be a resource!

 


 

 

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We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

 

© Copyright 2020, Windermere Real Estate/Mercer Island.

Posted on August 3, 2020 at 12:25 pm
Windermere MI | Category: Uncategorized | Tagged , , , , , , , ,

How to Spot Big Issues Before You Pay for a Home Inspection

How to Spot Big Issues Before You Pay for a Home Inspection

 

Before you plop down $500-$800 for a home inspection, it really helps to identify obvious issues up front and determine if A) you are willing to buy the home despite them or B) the seller appears reasonable about addressing them. If neither of the above are yes, but you might want to keep looking rather than investing hard-earned dollars in an inspection that, at minimum, will bring up items that you can clearly see, and more likely, will unveil even more issues.

Taking a bit of time to do a quick personal inspection of the property you are ogling can help you make smarter decisions about when or whether to write that offer. This list includes bigger ticket items we often see come up in an inspection.

 

    • Evidence of moisture or water damage in and around showers or tubs and under sinks

 

    • Missing or cracked grout/caulk around the tub or shower (a major cause of rot in walls and the sub-floor)

 

    • Cracked, peeling or weathered exterior paint and caulking

 

    • Evidence of moisture or water damage around the exterior, especially at windows and doors

 

    • Heavy moss, sagging or a roof that looks near the end of its life span

 

    • Signs of improper drainage around the perimeter of home, driveway and yard

 

    • Unexplained mildew smell in the basement

 

    • Uneven floors or the appearance of leaning or sagging

 

    • Obvious remodeling completed with no permits on file (this is easy to lookup online), especially when involving opening or movement of walls, plumbing or electrical

 

    • Rotted or damaged deck/porch boards, stairs, railings, or supporting joists/structure

 

    • An aging heating/AC system (more than 15-18 years old and/or no recent maintenance stickers)

 

    • An aging hot water tank (more than 9-10 years old)

 

    • Aging appliances (more than 10-15 years old)

 

    • An electrical panel that appears modified by someone other than an electrician (obvious changes that don’t look proper, open breaker sections or loose wires)

 

    • Railings (inside or out) that are missing or not up to code (ie. your smaller toddler could fit through them)

 

    • Cracked or damaged foundations or retaining walls

 

    • Evidence of unstable soil/earth movement (slides, cracks or gaps, leaning supports/structure or trees)

 

    • Evidence of rodents (odor, droppings, chew marks or damage around exterior/vents)

 

    • Properties with a high likelihood for costly sewer line issues include those with very large trees near the most likely sewer line path and those more than forty years with no prior evidence of sewer line re-lining/replacement

 

  • Signs of home maintenance neglect such as broken or missing hardware or components, improperly functioning doors/locks

 

Not all these issues will turn out to be major expenditures, but they often can be. Better to note them early and decide if it makes sense to proceed with a more thorough professional inspection or walk away and save those dollars for a more likely candidate.

Here are a few great online resources to add to your knowledge base:

https://www.homeinspector.org/HomeInspectionNews/the-quick-home-inspection-checklist-what-to-look-for-when-buying-a-home.5-1-2017.1724/Details/Story

https://www.hgtv.com/design/decorating/clean-and-organize/common-problems-found-during-home-inspections

https://www.familyhandyman.com/smart-homeowner/tips-for-getting-the-most-out-of-a-home-inspection/

https://www.zillow.com/sellers-guide/bad-home-inspection-for-sellers/

https://wini.com/articles/home-inspection-checklist-a-complete-guide-to-the-home-inspection-process/

https://www.familyhandyman.com/smart-homeowner/home-facts-this-is-how-long-these-parts-of-your-home-should-last/

 

Of course, nothing tops having an experienced broker to guide you through the process. They’ve seen hundreds upon hundreds of homes and can help you identify the solid finds from the duds with gorgeous looking veneer.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is one advantage you can’t afford to sacrifice.


ABOUT WINDERMERE MERCER ISLAND

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

 

© Copyright 2019, Windermere Real Estate/Mercer Island.

Posted on August 21, 2019 at 1:16 pm
Jennifer Craven | Category: Uncategorized | Tagged , , , , , , , , , , ,